Dampened China demand driving up Middle East purchases of Russian oil
China's appetite for fuel oil has been slowly increasing since the COVID-19 pandemic when the country implemented some of the strictest lockdowns in the world.
Russian fuel oil imported to the Middle East rose to a record high of 280,000 barrels per day (bpd) in June, but this rise was purely opportunistic rather than a true increase in regional demand, as a sanctioned Moscow needed to replace Chinese buyers for its products, according to new data.
Chinese demand for fuel oil has been slowly making a come back since the COVID-19 pandemic when the country implemented some of the strictest lockdowns on the planet. The economic recovery of the Asian powerhouse has been sluggish, as it was one of the last countries to lift social restrictions to prevent the virus. Saudi Arabia is China's biggest supplier of fuel oil.
Russia is one of the world's major oil and gas producers, but Western sanctions due to the invasion of Ukraine have meant that the country has had to look for customers elsewhere.
A report by commodities analytics firm Kpler seen by Al-Monitor said, “Fuel oil imports typically peak around this time of year due to high demand from power generation during peak cooling months, but the increase in imports from Russia is opportunistic, following Russia’s need to replace Chinese buyers, rather than exceptional demand from the Middle East.”
